Payson, Salt River Project will likely conclude historic agreement in April

The predicted date for tying up the loose ends on a deal to bring 3,000 acre-feet of new water to Payson from the Blue Ridge Reservoir has slipped into next month some time, said Payson Public Works Director Buzz Walker.

The long pause in arriving at the final agreement has stirred questions in both the current council race and in the uneasy truce between Payson and Star Valley, who have clashed in the past about Payson's use of water from a well in Star Valley.

Photo by Tom Brossart/Roundup

Water from Blue Ridge was a critical element in attracting ASU to Payson and providing a long-term water supply for the community, says Payson Mayor Kenny Evans.

However, the prospects for a deal that will transform Rim Country water politics remain bright, said Walker, despite this final delay.

The Salt River Project (SRP) is still totaling up its current investment in the Blue Ridge/C.C. Cragin Reservoir and a pipeline used to periodically pump Blue Ridge water into the East Verde River. But Payson officials anticipate no problems in finally signing an agreement that will make the town one of the few rural communities in Arizona with enough water to provide for all anticipated future growth.

"The ball on the final contract language is in Salt River Project's court," said Walker. "They said they could have a final revision to us in March or April. There aren't any major sticking points."

If all goes as planned, Payson would take delivery of the new water in about 2015, just when demand outstrips the capacity of its current network of groundwater-pumping wells. The reservoir water would then enable the town to virtually shut down its wells for some years, until continued population growth created new demand.

Projections suggest that when Payson reaches it's currently planned build-out population of about 36,000 residents, it will need the Blue Ridge water plus 1,800 acre-feet from its wells -- which is about what the town is pumping from the groundwater right now, according to Walker.

Payson Mayor Bob Edwards several weeks ago had announced the imminent signing of the deal with SRP, but Walker noted that SRP needed the extra time to review the agreement and its existing infrastructure.

Reaching this stage required a federal law and years of lobbying and negotiations to win for Payson the right to build a $30-million pipeline to take delivery of up to 3,000 acre-feet of water per year. The pipeline could in theory also carry another 500 acre-feet for other communities, like Star Valley.

Currently, Payson residents use about 1,800 acre-feet of water annually, all of it pumped from wells. That includes the controversial Tower Well in Star Valley, which can pump up to about 852 acre-feet. In the past year it has pumped less than 20 acre-feet.

The agreement with SRP trades the right to use 3,000 of the roughly 11,000 acre-feet stored in the Rim Country reservoir originally built by Phelps Dodge Corporation to provide water it could swap for rights to water needed for its mining operations elsewhere. A federal law ordered SRP to make the water available to Payson, but the glacial negotiation of the fine print has consumed nearly a decade.

In return for enough water to support a residential population of about 21,000, Payson will agree to use no more than 2,500 acre ground feet annually, said Walker.

He said that number is based on the amount of rainfall that seeps into the water table in an average year in the town's service area. The town's wells at present could pump approximately 2,600 acre-feet, if the Tower Well ran at full capacity.

Signing the agreement with SRP will then open the door to questions about a new host of details, like how Payson can finance the 14.5 miles of additional pipeline, what improvements to make in the existing SRP pipeline and pumping station so it can run continually instead of occasionally, how to get water to other communities like Star Valley and how to pay for the entire project.

The town has already done a lot of groundwork to qualify for a special federal grant and loan program for rural water systems, said Walker. The federal Bureau of Reclamation hasn't yet finished drawing up the rules for a program that will provide millions for western states to fund 40-year, low-interest loans and grants.

The town has also accumulated about $4.7 million in various fees and funding to contribute to the project. In addition, the town charges a water development fee of about $7,500 per unit to help finance the Blue Ridge project. Since the town issues an average of about 250 building permits annually, that fee could generate about $1.8 million annually to pay off bonding for the project.

As a result, the town could probably finance the $30 million pipeline through federal loans and grants and the town's water development fee without a significant impact on water rates for existing users, said Walker.

Meanwhile, the town must also work out a myriad of details concerning everything from how to treat the water and generate electricity as the water rushes down the pipeline. Other communities can negotiate their own deal with SRP and partner with Payson to get the water delivered. Potential partners include Star Valley and a half-dozen other Rim Country communities along the proposed pipeline route.

"We've been approached informally, but never by the water suppliers of any of those communities," said Walker. "The council has directed staff to make it happen."

The looming agreement has formed a backdrop to the current town council race, where the candidates have vied with one another to declare their affection for the project. All the candidates have said that completing the deal and pushing for quick action on the pipeline are among their top priorities.

Nonetheless, the project has prompted some back and forth exchanges between Mayor Bob Edwards and challenger Kenny Evans.

Those exchanges started with Edwards' criticisms of a campaign to support the project launched recently by the Board of Realtors. Edwards' has suggested that the Board of Realtors decided to launch its campaign of mailings and ads at the onset of the mayoral campaign to make it seem like he hadn't done enough to bring about the Blue Ridge project, and to therefore support Evans' challenge.

Edwards said the Realtors oppose him because of his support for a 250-unit-per-year building permit limit.

Former Mayor Cliff Potts, who heads the Board of Realtors' pro-Blue Ridge campaign, said the Realtors had launched the campaign before Edwards' announcement several weeks ago that the town and SRP would sign the agreement any day.

Potts said the Board of Realtors hasn't endorsed any candidate in the mayor's race and is happy that an agreement with SRP is now imminent. Still, he said, the ongoing campaign will build support for the necessary pipeline and other elements of the project.

Meanwhile, Evans has also complimented the present council and mayor on getting the deal so close to signing.

However, he has said that his decades of experience as a grower in securing and negotiating water rights with local, state and national agencies will prove useful to the town.

Edwards, for his part, has said that he pushed hard to keep the Blue Ridge deal on track and will continue to make it a top priority.